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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense (benefit) on continuing operations consists of the following:
 Year Ended December 31,
 202120202019
 (In millions)
Current$656 $379 $268 
Deferred57 (57)40 
 $713 $322 $308 
Total income tax expense was allocated as follows:
Year Ended December 31,
 202120202019
(In millions)
Net earnings from continuing operations$713 $322 $308 
Other comprehensive (loss) earnings:  
Unrealized (loss) gain on investments and other financial instruments(141)332 16 
Unrealized gain on foreign currency translation and cash flow hedging— 1 1 
Minimum pension liability adjustment(2)4 — 
Total income tax (benefit) expense allocated to other comprehensive earnings(143)337 17 
Total income taxes$570 $659 $325 
A reconciliation of the federal statutory rate to our effective tax rate is as follows:
 Year Ended December 31,
 202120202019
Federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal benefit1.6 2.5 1.7 
Stock compensation(0.2)(0.3)(0.8)
Tax credits(0.2)(0.4)(0.1)
Consolidated partnerships(0.1)(0.3)(0.2)
Tax gain on parent shares held0.5 — — 
Valuation allowance for deferred tax assets(0.3)(3.0)— 
Change in tax status benefit— (2.0)— 
Non-deductible expenses and other, net0.8 0.5 0.9 
   Effective tax rate23.1 %18.0 %22.5 %
The significant components of deferred tax assets and liabilities consist of the following:
 December 31,
 20212020
 (In millions)
Deferred Tax Assets:  
Employee benefit accruals$111 $94 
Net operating loss carryforwards27 17 
Accrued liabilities1 12 
Allowance for uncollectible accounts receivable5 5 
Pension plan2 — 
Tax credits77 59 
State income taxes8 4 
Capital loss carryover41 35 
Basis difference held-for-sale— 19 
Life insurance and claim related adjustments854 861 
Funds held under reinsurance agreements52 85 
Other33 13 
Total gross deferred tax asset1,211 1,204 
Less: valuation allowance33 45 
Total deferred tax asset$1,178 $1,159 
Deferred Tax Liabilities:  
Title plant$(52)$(56)
Amortization of goodwill and intangible assets(140)(148)
Other investments— (7)
Other(2)(23)
Investment securities(401)(601)
Depreciation(29)(17)
Partnerships(182)(83)
Value of business acquired(249)(308)
Derivatives(68)(38)
Deferred acquisition costs(102)(6)
Transition reserve on new reserve method(34)(43)
Funds held under reinsurance agreements(74)(58)
Title Insurance reserve discounting(50)(63)
Total deferred tax liability$(1,383)$(1,451)
Net deferred tax liability$(205)$(292)
 
Our net deferred tax liability was $205 million and $292 million as of December 31, 2021 and 2020, respectively. The significant changes in the deferred taxes are as follows: the deferred tax liability for investment securities decreased by $200 million primarily due to unrealized losses recorded on investment securities, of which $97 million was related to unrealized losses in our Title segment and $103 million was related to unrealized losses in our F&G segment's life insurance business. The deferred tax liability relating to partnerships increased by $99 million, primarily due to increased investments in higher yield partnerships by F&G and the related unrealized gains. The F&G segment's life insurance business’ deferred tax liability relating to VOBA decreased by $59 million due to GAAP amortization. The deferred tax liability related to deferred acquisition costs increased by $96 million, which is consistent with the growth in sales in our F&G segment. The deferred tax liability relating to derivatives in our F&G segment increased by $30 million due to unrealized gains on call options. The deferred tax asset related to credit carryovers increased by $18 million, of which $11 million related to our F&G segment's life insurance business and $7 million related to Title segment. The deferred tax asset for basis differences held-for-sale was reduced by $19 million due to the sale of an F&G entity. The reinsurance receivable deferred tax asset decreased by $33 million
and the reinsurance receivable deferred tax liability increased by $16 million, both due to unrealized gains in the funds withheld portfolios within our F&G segment.
As of December 31, 2021, we have net operating losses ("NOLs") on a pretax basis of $129 million, of which $53 million related to our Title segment and $76 million related to our F&G segment's life insurance business, which are available to carryforward and offset future federal taxable income. The NOLs are U.S. federal NOLs arising from acquisitions made since 2012, including Buyers Protection Group, Inc., Digital Insurance Holdings, Inc., ServiceLink/THL Corporations and F&G. Most of the NOLs are subject to an annual Internal Revenue Code Section 382 limitation. These losses will begin to expire in year 2023 and we fully anticipate utilizing these losses prior to expiration with the exception of $24 million of gross net operating losses that are offset by a $24 million valuation allowance in the title segment. 
As of December 31, 2021 and 2020, we had $77 million and $59 million of tax credits, respectively, which expire between 2025 and 2041. The credits primarily consist of general business credits from historical acquisitions, including $32 million associated with our F&G segment's life insurance business. We anticipate that these credits will be utilized prior to expiration after a valuation allowance of $28 million on the general business credits in our title segment.
 
As of December 31, 2021 and 2020, the balance of unrecognized tax benefits which would, if recognized, favorably affect our effective tax rate was $24 million and $28 million, respectively. Interest and penalties accrued on income tax uncertainties are recorded as a component of income tax expense and were $1 million as of December 31, 2021 and 2020. It is reasonably possible that as a result of the carryback request and approval of the Joint Committee of Taxation, unrecognized tax benefits could decrease as much as $58 million within the next 12 months. This reserve relates to a timing difference.
A reconciliation of the beginning and ending unrecognized tax benefits is as follows (in millions):
Year ended December 31,
20212020
Beginning balance$64 $7 
Additions based on positions taken in current year— 58 
Reductions related to statute of limitation lapses and audit payments(4)(1)
Ending balance$60 $64 

F&G's life insurance subsidiaries, as well as certain F&G non-life subsidiaries file separate tax returns from the FNF consolidated group. Prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2021 includes $52 million of tax receivables related to F&G subsidiaries that file separate tax returns. Prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2020 includes $20 million of tax receivables and $8 million in deferred tax assets related to F&G subsidiaries who file separate tax returns.
The Internal Revenue Service (“IRS”) has selected us to participate in the Compliance Assurance Program that is a real-time audit. We are currently under audit by the IRS for the 2021 through 2022 tax years. We file income tax returns in various foreign and US state jurisdictions. Our state income tax returns for the 2017 through 2021 tax years remain subject to examination by state jurisdictions. The F&G life insurance group files a separate consolidated return with the IRS. F&G is not currently under examination by the IRS.